2021 was by all accounts a very successful year for SG Capital, with all strategies handily beating their respective benchmarks. We are thankful to have performed well for clients and for the good health of our employees and their families.
While the equity indexes were broadly higher, there were mine fields that we were pleased to have avoided over the last twelve months. We navigated the rotations in and out of the perceived Covid beneficiaries and the re-opening trades well this year, as many of last year’s winners became this year’s losers. While November brought a steep pullback in highly valued growth names that hurt performance for many of our peers, we performed well in the month.
Throughout the year, we added significant alpha with our stock picking strategy that focuses on company fundamentals and earnings surprises. Our bottom-up research effort allowed us to uncover opportunities where stock prices were dislocated from their earnings performance resulting in strong alpha.
As we enter 2022, the environment remains fluid with many variables impacting companies’ profitability. Over the last several months, companies have faced demand fluctuations due to Covid and stimulus impacts, commodity inflation, supply shortages, logistics congestion, and labor issues. We are hopeful that our investing strategy will continue to benefit from these existing dynamics over the coming year.